ChoiceOne Financial Reports Third Quarter 2020 Results | State

SPARTA, Mich., Oct. 28, 2020 /PRNewswire/ — ChoiceOne Financial Services, Inc. (“ChoiceOne”, NASDAQ:COFS), the parent company for ChoiceOne Bank reported financial results for the quarter ended September 30, 2020.

Significant items impacting comparable third quarter and year to date 2020 and 2019 results include the following:

• On October 1, 2019, ChoiceOne completed the merger (the “County Merger”) of County Bank Corp., the former parent company of Lakestone Bank & Trust, with and into ChoiceOne with ChoiceOne surviving the merger. Lakestone Bank & Trust was consolidated with and into ChoiceOne Bank effective May 15, 2020.  The total assets, loans and deposits acquired in the County Merger were approximately $712 million, $424 million and $568 million, respectively. 
• On July 1, 2020, ChoiceOne completed the merger (the “Community Shores Merger”) of Community Shores Bank Corporation, the former parent company of Community Shores Bank, with and into ChoiceOne with ChoiceOne surviving the merger. Community Shores Bank was consolidated with and into ChoiceOne Bank effective October 16, 2020. The total assets, loans and deposits acquired in the Community Shores Merger were approximately $249 million, $168 million and $231 million, respectively.
• ChoiceOne incurred tax-effected merger-related expenses of approximately $1,423,000 and $2,167,000, respectively ($0.18 per diluted share and $0.29 per diluted share, respectively), for the quarter and year ended September 30, 2020.

Financial Highlights

• Net income of $3,829,000 in the third quarter of 2020 compared to $1,021,000 in the same period in 2019.
• Diluted earnings per share of $0.49 in the third quarter of 2020 compared to $0.28 per share in the third quarter of the prior year.
• Excluding $1,423,000 in tax-effected merger-related expenses, net income in the third quarter of 2020 was $5,252,000 or $0.67 per diluted share.
• Excluding loans obtained in the Community Shores Merger, gross loans increased $32.7 million during the third quarter of 2020.
• ChoiceOne incurred $1,225,000 in provision for loan losses expense during the third quarter of 2020 and $3,000,000 in the first nine months of 2020, much of which was related to the impact of the COVID-19 pandemic.
• Excluding deposits obtained in the Community Shores Merger, total deposits grew $30.8 million in the third quarter of 2020.

ChoiceOne reported net income of $3,829,000 for the third quarter of 2020 compared to $1,021,000 in the same period in 2019. Diluted earnings per share were $0.49 in the third quarter of 2020 compared to $0.28 per share in the third quarter of the prior year. Excluding $1,423,000 in tax-effected merger-related expenses, net income for the third quarter of 2020 amounted to $5,252,000 or $0.67 per diluted share, compared to $1,642,000 or $0.45 per diluted share in the same period in 2019 when adjusted for tax-effected merger-related expenses. Net income for the first nine months of 2020 was $11,513,000 or $1.55 per diluted share, compared to $4,144,000 or $1.14 per diluted share in the first nine months of 2019. Net income for the first nine months of 2020, when adjusted to exclude $2,167,000 of tax-effected merger-related expenses, was $13,680,000 or $1.84 per diluted share, compared to $5,338,000 or $1.46 per diluted share in the same period in the prior year when adjusted for tax-effected merger-related expenses.  The increases in net income as compared to prior periods in 2019 are largely due to the County Merger and the Community Shores Merger.  Higher levels of gains on sales of loans in 2020 compared to the prior year also contributed to net income growth. 

“ChoiceOne is pleased and grateful to report strong net income for the third quarter of 2020, particularly in light of the COVID-19 pandemic,” said ChoiceOne CEO Kelly Potes. “We experienced significant gains on sales of mortgages offset by a large provision for loan losses…